Inter Parfums (IPAR) Up More Than 40% in 3 Months: Here's Why
Focus on a solid brand portfolio and product launches is favoring Inter Parfums, Inc. IPAR. The provider of fragrances and related products’ strategic partnerships bodes well. The company is benefiting from solid growth across European and U.S. operations. These abovementioned upsides have boosted fourth-quarter 2022 results, with the top and bottom lines increasing year over year.
Inter Parfums began 2023 on a solid note, with sizable orders booked in the first two months. Management raised its 2023 guidance. For 2023, it now expects net sales of nearly $1.2 billion, up 10% year over year. The company earlier expected net sales of $1.15 billion in 2023. Management now expects 2023 earnings per share (EPS) of $4.00, up 6%. Earlier, the company had expected earnings of $3.75 per share.
The Zacks Rank #1 (Strong Buy) company’s shares have rallied 42.4% in the past three months compared with the industry’s 2.2% growth. Let’s delve deeper.
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Brand Strength Boosts Growth
Inter Parfums has been benefiting from strength in its brand portfolio, which continued in the fourth quarter of 2022. Quarterly net sales increased 47% to $311 million compared with $211 million reported in the year-ago quarter. Inter Parfums’ Europe-based product sales came in at $197 million, up 45% from the 2021 levels. U.S.-based product sales amounted to $114 million, increasing 52% from the fourth quarter of 2021.
In the fourth quarter, IPAR witnessed solid sales increases from its largest brands, including Montblanc, Jimmy Choo, Coach and GUESS?, which delivered growth of 50%, 78%, 82% and 28%, respectively. In the company’s U.S. operations, brands like Oscar de la Renta and Abercrombie & Fitch delivered sales growth of 28% and 16%, respectively, in the fourth quarter. In European operations, Moncler, Kate Spade and Boucheron brands witnessed solid increases of 34%, 140% and 25%, respectively.
Product Launches on Track
Inter Parfums expects to unveil new products and brand extensions throughout 2023. The company’s largest European-based brand, Montblanc, will release a sister scent for the signature line and one for men in the Explorer franchise. The company will introduce Rose Passion, a new flanker for Jimmy Choo. Its Coach brand will add scents for men and women. Inter Parfums’ mid-sized brands will roll out new scents, like a collection for Moncler and Chérie by Kate Spade. It will also add fragrance to Rochas and Van Cleef & Arpels family.
For the U.S.-based operations, every brand in the portfolio is introducing companion products for existing programs. In addition, management has a new version of GUESS Uomo and Bella Vita in the pipeline. The company is on track with launches for Abercrombie & Fitch. The company will launch its first men’s scent for the MCM brand.
Strategic Partnership Holds the Key to Growth
Inter Parfums is on track to expand its business through new licenses or acquisitions. In December 2022, its majority-owned Paris-based subsidiary, Interparfums SA, signed a license agreement with Lacoste — a well-known fashion sports brand. Both parties have entered a worldwide exclusive 15-year fragrance license agreement, effective Jan 1, 2024. The company is optimistic about the partnership with well-established fragrance brands like Donna Karan and DKNY.
In December 2021, Inter Parfums, through its subsidiary Interparfums Italia signed a 10-year exclusive global licensing agreement with Emanuel Ungaro. In October 2021, Inter Parfums finalized the agreement with Salvatore Ferragamo S.p.A. Per the agreement, Inter Parfums holds the exclusive worldwide license for the production and distribution of Salvatore Ferragamo brand perfumes.
Certainly, focus on effective partnerships along with the aforementioned upsides will keep IPAR in investors’ good books.
Solid Staple Bets
Some more top-ranked stocks are Post Holding POST, General Mills GIS and The Hershey Company HSY.
Post Holdings, which is a consumer-packaged goods company, sports a Zacks Rank #1 at present. Post Holdings has a trailing four-quarter earnings surprise of 34.8%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for POST’s current financial-year sales and earnings suggests growth of 2.5% and 119.6%, respectively, from the year-ago reported numbers.
General Mills, a branded consumer foods company, currently carries a Zacks Rank #2 (Buy). GIS has a trailing four-quarter earnings surprise of 8.7%, on average.
The Zacks Consensus Estimate for General Mills’ current fiscal-year sales and earnings suggests growth of 5.1% and 6.1%, respectively, from the corresponding year-ago reported figures.
Hershey, the leader in chocolate and non-chocolate confectionery, currently carries a Zacks Rank #2. HSY has a trailing four-quarter earnings surprise of 11.3%, on average
The Zacks Consensus Estimate for Hershey’s current financial-year sales and earnings suggests growth of 7.7% and 10.1%, respectively, from the year-ago reported numbers.
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